Family Budget Update– June 2017

Have you ever budgeted for an expense you knew was coming up, but then forgot that you did? I did that this month and it was the best feeling.

When I budgeted at the beginning of the month (using last month’s income), I set aside $3,000 to cover a portion of the major repair we would be doing on our rental unit. I figured that was all we could spare from the budget so we would need to dip into the emergency fund to take care of the repair.

Fast forward to the end of the month when our contractor was available to do the work. I somehow had it in my mind that the money to cover the repair was going to have to come out of the emergency fund. I was mentally geared up for that.

When I sat down at the computer to move money around and record the transactions, I realized that I had in fact set aside money for the repair. I had completely forgotten that I had done that, so I was thrilled! A budget nerd high, for sure!

In fact, between moving money around in different budget categories and using June’s rent money, I was able to cover the entire cost of the repair!

Hooray for looking ahead and budgeting!

Now let’s look at how everything else went for us in June. As always, these reports are meant to encourage you and show you what a real-life, practical family budget looks like. The numbers have changed pretty drastically over the years since I first started these reports, but they’re all the real thing.

Income

Attorney Income (Day Job)– $5,509 Mr. SixFiguresUnder has been working full-time as an attorney for the state of California since the fall of 2015. His actual take-home pay was $4,407 but I add back in the cost of the benefits (insurance, dental, vision, parking, union dues and retirement) that are automatically taken out of his check so that it is more easily compared with our old income from the small firm when we didn’t have any benefits.

Attorney Income (Private Practice)– $2,753 On top of working full-time, my husband has his own private law practice on the side (crazy, I know!). He started it to help speed up our debt payoff and because he had clients from his days at the small firm that didn’t want to let him go. He hasn’t done any advertising since being on his own, but the work keeps coming in. His income fluctuates greatly from month to month.

My Income (Blog)– $2,182 The income that I report is the income that I received this month minus all of my blogging expenses. Of this, I set 30% ($654) aside for self-employment taxes and the remainder ($1,528) goes into the family budget.

For the past six months (between pregnancy and having no internet at home), I haven’t done much to grow my blog (besides posting 4-6 times a month) and it still brings in a consistent income. As soon as we get internet (later this week!!!) I will start working on growing my blog, but for now I’m thrilled that it has held steady all this time.

If you’re interested in the details of my blogging income and expenses as well as other blogging tips and resources, you can sign up for my Behind-the-Scenes Blogging emails to get the scoop.

Our spending in June came from the income we earned in May. Here’s how we spent money in June:

Tithing– $1,148 We happily pay a 10% tithe on our total income from the previous month (May). You can read more about why we paid tithing even when we were in debt. Since we pre-paid a big chunk of tithing at the end of 2016 (for tax reasons), this didn’t actually come out of our pockets this month, but we’re keeping track so we know when we’ve reached the end of our $8,000 of pre-paid tithing.

Electricity– $168 Our bill was less than last month, which was an absolute shock, seeing as we now have renters who are on the same utility lines (read about how we got renters here)! I attribute it to being very involved with our bill and daily usage. We have been really motivated by the OhmConnect program which lets you earn some extra money for saving power. My kids think it’s super fun to save power now. They love “Ohm hours”! If you’re in California (or Toronto or Texas, I think) then you should definitely check it out! If you live in other places, you can sign up too, and earn prizes instead of cash.

Water– $45 Our water bill comes every other month, so I just set aside approximately half of what I expect the bill to be.

Trash– $18 You can read all about how we keep trash costs low here, though with having renters now and a new baby soon, I might bite the bullet and go with a trash pick-up service. We’ll see.

Internet– $213 We bought a new wireless router (we let the in-laws keep ours when we left) and cable modem (so we don’t have to pay $10/month to rent it from the cable company). The work on the poles to physically bring the line to our home (what we paid $4,800 for several months ago) was completed last week. Our installation (where the internet is activated) is later this week. And we can hardly wait!!!

Republic Wireless Cell Phones– $36 We’ve been using Republic Wireless as our cell phone carrier for over two years now. This covers the cost of service for both our phones, including all taxes and fees (we’re on the Republic Refund plan). If your cell phone bill is killing you, I definitely recommend that you check them out!

Health Insurance– $408 We have insurance through my husband’s employer. This is the portion of the insurance premium that his employer does not cover. It includes health, dental and vision insurance premiums.

Car Insurance– $220 We once again have three cars on our insurance. Hopefully in July we will sell or donate my husband’s old car so we’ll get it back down to paying to insure just two cars. Our auto insurance at USAA is fabulous! In addition to the wonderful coverage, they also give us dividends at the end of the year, which is always a nice treat. We’re able to get insurance with USAA because my husband’s father was in the service years ago. If you or your parents were in the military, you’re probably eligible for USAA too!

Food– $511 I knew this month would be higher than usual for several reasons. I ordered another 40 lb box of fresh chicken breasts from Zaycon Fresh at the beginning of the month, which will last us about 4 months. Their prices are are great, the meat is great, and I love the ease of just driving up and having someone load the box in the car for me. When you sign up for Zaycon’s emails, you will get emails for their coupon codes and deals, so the prices are even better than the everyday prices listed on their site. I also found a killer deal on cereal later in the month, so I bought a lot. A lot! Cold cereal is a sanity saver for me when I’m pregnant. Often, the best deals are for the cereals that are loaded with sugar, but this time I found a deal on normal, healthy cereal so I couldn’t pass it up.

Gas– $341Not having to drive the kids to their old school has saved us hundreds in gas (and ten hours a week of driving time for me)! My husband still commutes downtown for work, so our gas bill will never be low, but this is much better than what it usually is!

Parking– $155 Working downtown means paying for parking. It comes straight out of my husband’s paycheck, which means it is paid for with pre-tax dollars, a small consolation.

Clothing– $82 When we were at Sam’s Club my husband picked up three pair of dress pants. He wears dress pants 6 days a week and has been putting lots of wear and tear on his suit pants lately. There were also some short sleeve button up shirts on clearance for him that I couldn’t resist (I am a sucker for gingham!).

Household– $137 We bought an FM transmitter so that we can play audio from our phones through the van’s speakers. This way we can listen to audio books from our phones (so everyone can hear them) instead of having to get them on tape or CD. We borrowed A Series of Unfortunate Events Book One on cassette from the library a while back and misplaced one of the tapes. I kept renewing it in hopes of finding the tape, but then we ran out of renewals and still couldn’t find it. I ordered a replacement on Ebay for $13 and literally found the tape (on top of the dryer with some odds and ends brought in from a road trip) the very next day. So now we have our own set of tapes. We also got an ironing board from the thrift store and some toiletries (not from the thrift store, ha ha!).

Fun– $100 I was gone for a week helping out at a girls’ camp for teenage girls from our church. While I was gone, the kids enjoyed pizza and several Redbox movies with Daddy. We’ve had pizza a couple of other times this month too. We went to the county fair on the day when kids were free (but adults still had to pay)

Home Improvement– $47 Primer for the boys’ triple bunk bed and weather stripping for the back door (which ended up being the wrong stuff). We had several Home Depot gift cards that we used to get some other things for the house or rental, too.

Rental — $3,565 We made a major repair on our rental unit. We had planned to make the repair before renting the apartment, but the renters came our way first. Still, we wanted to make the repair ASAP since it was a safety issue. This is the amount of money we took out of our own budget (not the cashflow of the rental, which we keep separate).

Furniture– $323 I found a great couch at the thrift store on half-off day that goes well with a love seat I bought a couple of months ago. We also got a new queen mattress and box spring for our guest room. Our Goodwill has new mattresses and box springs at great prices. Since we had very little notice before we needed a guest bed, we decided to give Goodwill a try. We have more guests coming, so as soon as they’re all gone, we’ll give the bed a try ourselves. We are planning to save for a new mattress for ourselves very soon. We’ve had our queen for 12 years and it’s far from comfy now. We’d like to get a California King so my husband’s feet won’t hang off the end anymore.

Animals– $74 We stocked up on chicken feed when it was on sale and also bought some cat food.

Tax Prep– $90 Our tax advice and preparation plan allows the cost to be spread over the year.

Quarterly Taxes– $3,692 Every month, I set aside 30% of my blog proceeds to a tax account so that we won’t be hit as painfully as we were this year. Theoretically we do it with my husband’s law practice too, though we haven’t actually done it yet. We had the majority of this saved in our tax account. Just over $700 came out of our family budget this month.

Sinking Funds

Now that we’re done funneling every extra cent toward debt, we are using sinking funds in our budgeting. This is money that we set aside each month into certain categories where it builds up until we need it.

Last month we didn’t do much with sinking funds, so I tried to catch up a little this month.

Car Repair– $200

Medical– $150 We’re expecting a new baby at the end of August!

Car Registration & Smog– $60

Christmas– $100

Life Insurance– $70 If we put this much in each month, we will have our premiums set aside for when they’re due in the fall.

Gifts– $60

Retirement– $539 With my husband’s state job, this amount comes directly out of his paycheck and into his state retirement fund.

College Savings– $100 We contribute $25 per month per child to 529 accounts. It’s not much, but it’s a start. More on our decision to start saving for college in this post.

Savings Goals

Here’s a quick look at our current savings goals. We’ve taken care of taxes, the cost of getting internet installed, and saving for a new (used) car.

Next up is beefing up our our emergency fund so that it will cover at least 3 months of expenses. Right now our emergency fund is sitting at around $5,000. We knew we wouldn’t get to this in June with the rental repair, but we’re hopeful that we can add to our emergency fund in July! I’m just thrilled that we didn’t have to dip into the emergency fund to take care of the repair!

How About You?

I’d love to hear about how your budget and/or debt repayment went in June!

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Comments

We paid off all of our debt except our house last year. Our goal for June was to pay cash for a trip to California for my cousin’s wedding, which we were able to do!! AND we were able to put a little bit into our Emergency Fund as well. We are now sitting at five months worth of expenses. (Our goal is six.) Next month, we will be saving for our ten-year anniversary trip to Mexico. It’s actually our “honeymoon” since we never took one. I am really hoping that we will not need to dip into our Emergency Fund for anything, since summer income is lower for us. I teach part-time and tutor part-time during the school year. Fingers crossed!

I budget every month, but have not been able to get ahead. I have $75 in a emergency fund so that is a start. We bring home $2700 a month after taxes. I am hoping that this website will help me find new ways to make some money to add to our emergency fund.

I think your $75 is a great start to your emergency fund.
1981 I was a divorced mum of 2, went to Uni to get a degree so I could get a job to support us all. Luckily, in those days there were state grants and I did odd bits of work in the holidays and weekends. Any money left when the next cheque came in went into my emergency fund– even if it was just £5. I’ve kept the habit up for 36 years!
If you’re determined, you’ll do it. It’s just sticking with it when times are tough financially and also recognising when you need to use the emergency fund.

Hi Stephanie
Can I ask you about the finances of having a baby in the US ?
Will you have to pay on top of what you pay in insurance ?

I live in the UK, and you probably know we have the National Health Service, funded via taxes. The only thing I can think prospective parents would pay for is the advanced 4D scan ( I think that’s what it’s called)
All hospital stays for mum and baby are provided, along with Intensive Care for babies, if needed. My granddaughter had 9 weeks of Neonatal Intensive care ( bar one day!) and I dread to think what that would have cost.

‘Budget nerd high’ lol. I’m the budget nerd in my household, too, and I completely understand the joys of budgeting and good surprises. I recently calculated our net worth, which I hadn’t done in a few years, and was floored (in a good way). Tomorrow we’re taking the kids to the local amusement park and out to dinner (Bday celebration for my daughter). The day will be expensive, but as we’ve budgeted and planned for it, it’s no big deal. There was a time in my adult life when such a day would have been way too expensive to even consider. To have taken control of our finances and be able to do such a thing while not missing a beat with our expenses and savings goals is an absolute delight. Without budgeting, it never would have happened without consequence.

I am the Queen of Sinking Funds. We have roughly 15 or so running, not counting things like college and retirement. Some of them include Christmas, kids’ 8th grade Washington DC trips, kids’ cars, our car fund, home repairs/improvements, vacation, medical/vet expenses and the plow fund (because living here in NH, some winter months can really hurt that wallet if you have a lot of storms, so better to save a nominal amount each month year round and not sweat it). Some people cringe at the idea of so many categories or accounts, but I adore them. They keep me on track and organized.

We overpaid $749.66 on our mortgage last month. It’s hard to predict as my husband’s income can vary wildly, but we hope to have it paid off in 6-6.5 years, which would be roughly 9 years ahead of schedule. I hope to have it done by my 45th birthday, but I’ll take ‘at’ 45 instead of ‘before’ 45 if I must. I’ve run the numbers considering refinancing, and find it’s not worth it, even with a better interest rate. With all the money we’re throwing at it each month, it’s basically a wash if we refi (considering the cost).

In June I paid 5 times the normal student loan repayment. My husband took 2.5 days off of work so we could do a mini vacation. The first part was a trip to visit friends who recently had twins the rest of it was spending a day out on the lake with one of my siblings. I did a reverse budget for the first time in 18 months and saw the areas where there’s been some creep so I can adjust spending as needed this month.

We’re not paying extra on our mortgage yet, but I finished my graduate degree on the 3rd and have started picking up more work. I work from home and can work a couple hours when the kids are asleep or a full day. They will pretty much take me whenever I am willing and able. I worked 30 hours last week, but the kids were only with the sitter for 16 of those hours. I played with our budget too and set a higher savings goal,to cover my Roth IRA, family vacation fund (Disney and Tampa next spring), my personal travel fund, a car replacement for my husband, repairs around the house, and eventually mortgage payoff.

The regular price is $1.89/lb (boxes are 40 lb, so $75 for the box), but when you’re on their mailing list they ALWAYS send discount codes. I just looked up my last receipt for fresh bonesless skinless chicken breasts and after the coupon code, I paid $1.47/lb ($59 for a 40 lb box).